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Soybean Jumps As Crop Planting Expected to Be Higher

June 25, 2019 at 13:02 by Andrew Moran

Soybean futures climbed higher on Tuesday as a major weather service predicted a substantial jump in soybean planting this week. This comes as US soybean export inspections surged in Chinese shipments for the week ending June 20. Soybean prices have been on a tear in the last month, climbing nearly 7% and bringing the crop into positive territory on the year, which is welcomed news for American farmers.

August soybean futures tacked on $0.05, or 0.55%, to $9.144 per bushel on Tuesday on the Chicago Board of Trade (CBoT). Year-to-date, the agricultural commodity is up a little more than 2%, a rebound from its double-digit losses for the first few months of 2019 amid the US-China trade war.

In a new analysis by AccuWeather, a commercial weather forecasting service, the percentage of soybeans planted in 18 states is projected to expand when the US Department of Agriculture (USDA) publishes its Crop Progress report next week. It is estimated that soybean planting will be in the 90-percentile range and end the month higher.

The previous USDA progress report found that 77% of soybeans were planted, below the five-year average of 93%. The best spots for soybean plantings have been in Louisiana, North Dakota, and Minnesota. The worst places have been in Ohio, Michigan, and Missouri – these areas have been decimated by flooding problems after significant storms.

In the end, however, AccuWeather does believe 2019 soybean output will slip below 2017 and 2018 levels and be under the USDA’s 2019 projections.

Meanwhile, new US government data found that export inspections for domestically sourced soybeans that were being shipped to China totaled 682,155 mt for the week ending June 20.

Brazil has taken advantage of the US-China trade spat, eating away at US market share and receiving a lot of business from the world’s biggest soybean consumer. However, it was discovered that China’s may soybean imports from Brazil plunged 31%, compared to the same time a year ago, reports the General Administration of Customs.

Last month, China purchased 6.3 million tonnes of soybeans, down from 9.124 million tonnes in the previous year. Buyers are ostensibly limiting their purchases of the animal feed ingredient because of the African swine fever that continues to paralyze this sector. Since August 2018, there have been 137 reported outbreaks of the disease in nearly all the nation’s provinces.

Analysts say that pork output could drop by 30% in 2019, though imports have climbed in the last two months because the government is anticipating renewed demand.

While Washington and Beijing prolong their spat, Canada and China are having their own diplomatic fallout, too. This is evident in the latest soybean data, which highlighted a 95% crash in the first few months of 2019. Canadian soybean exports to China fell 3,282 tonnes between January and March, down 72,806 tonnes from the same time a year ago. This is in stark contrast to the 3.2 million-tonne purchase in the final four months of 2018.

In other agricultural commodities, July corn futures are up $0.0425, or 0.95%, to $4.51. July wheat futures advanced $0.0475, or 0.88%, to $5.4725. July orange juice futures soared $0.028, or 2.82%, to $1.0205 per pound.

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